American credit card debt has reached an all-time high of $1 trillion, according to the Federal Reserve Bank of New York. With so many Americans facing debt, now is the time to learn how to confidently navigate through your finances. The first step is creating a financial wellness plan that can help you meet your financial goals and manage your debt this year.
According to a recent Charles Schwab Corp. survey, only 28% of Americans have a written financial plan. Of the remaining 72% who don’t, half of those believe they don’t have enough money to make a plan worthwhile. The rest feel it’s too complicated and time-consuming to do so.
However, consider the fact that having a financial wellness plan in place has proven to build confidence, peace of mind and the ability to understand and achieve financial goals.
Starting your journey to financial wellness does not require a lot of savings. It starts with shaping your spending habits in ways that benefit your future self. A good place to start would be to set your budgeting percentages with the 50/30/20 method and link your bank account to a budgeting app that helps you track your habits. This approach gives you an idea of where your money is going, so you can make decisions that prioritize your goals.
Budget Percentages | ||
| Needs (50%) | Wants (30%) | Savings & Debt (20%) |
| ● Groceries ● Housing ● Utilities ● Transportation | ● Shopping ● Dining out ● Hobbies ● Leisure | ● Investments ● Student loans ● Credit Card |
Having a financial plan in place can help you make better financial decisions and boost your confidence in the process. And, like any journey, it helps to have people along the way pointing you in the right direction.
Once you meet a certain goal, where to next? If something unexpected happens, what private or public programs exist to help you through it? Consider the help of a financial coach to guide you.
Creating a financial wellness plan with the help of a financial coach can be part of your first step forward to financial confidence. With a financial coach, you receive answers to your questions, guidance, and support as you work toward your financial goals.
Financial coaches can help you with debt management, so you can get out of debt and no longer be one of the many Americans with record-high debt.